Shanell McNamee has lived at Brookland Manor since she was 11, and lives there now with her mom and sister. She’d like to see 535 affordable units in the redevelopment.  Image by the author.

This post is part of an ongoing series about Brookland Manor, a controversial development project just east of the Rhode Island Metro station that epitomizes the complex dynamics of building housingespecially affordable housingin DC.

The owners of Brookland Manor, MidCity Financial Corporation, originally proposed to replace 521 existing affordable apartments with 2,235 apartments and townhomes. Under this proposal, 436 would have been affordable, but DC's Zoning Commission said that plan violated restrictions in the Comprehensive Plan. Now the company wants to build 1,760 units, of which roughly 380 would be affordable. Tenants and their advocates didn’t like the old plan because it didn’t preserve all the existing affordable units, and they say the new one would lead to displacement as well. They’re pushing for full replacement of the existing affordable apartments.

373 of the apartments at Brookland Manor are affordable to tenants that make less than about $30,000 annually for a family of three because their rents are subsidized through the federal government’s project-based Section 8 program, administered by the Department of Housing and Urban Development (HUD). These subsidies are tied to specific apartments rather than individual renters (as happens in DC’s housing voucher program).

Here’s how rent payments work in this program: MidCity and HUD agree on what’s called the “contract rent.” This is the rent MidCity collects on the 373 apartments, and it’s supposed to be roughly market rate (it can be somewhat higher or lower). Tenants pay 1/3rd of their income in rent to MidCity, and HUD pays the difference between that amount and the “contract rent.” The idea is that the owner gets roughly market rent, while the tenants get housing they can afford.

MidCity has had a Section 8 contract with HUD on those 373 apartments for 40 years, and that contract expires this year. MidCity has promised to renew its Section 8 contract and keep 373 apartments deeply affordable after the redevelopment is completed.

The remaining apartments are affordable, but they aren’t part of HUD’s Section 8 program

Brookland Manor contains another roughly 150 apartments that have been affordable not because of the Section 8 contract, but because of the project’s age, location, and (potentially) MidCity’s HUD-subsidized, “Section 236” mortgage. This mortgage had an effective interest rate of 1%, at a time when 30-year mortgages were going for 9%. That came with restrictions on how much MidCity can increase rent each year. I don't know whether those stipulations acted as a real cap, however, or whether the “natural rent” fell below the cap due to the age and location of the apartments.

Either way, a non-Section 8, 2-bedroom apartment in the complex goes for less than $1,560 per month. That’s cheap: low-income, market rate renters can afford to live at Brookland Manor (although they represent only about 2% of the occupied units).

Most non-project-based Section 8 renters at the complex use housing vouchers from the DC Housing Authority (DCHA) to make full rent. Folks with these vouchers pay 1/3rd of their income as rent to MidCity, and DCHA then pays MidCity the remaining amount between what the tenant pays and the market rent. So MidCity still gets the full market rent if voucher holders live in its apartments.

DCHA only lets vouchers be used for apartments where the market rent falls below a certain threshold. This is called the “allowable rent.” Currently, rents at Brookland Manor fall below that threshold, which is why many people with vouchers live there.

Redevelopment could upend the current affordability situation at Brookland Manor

Market rate rent in the new development would be substantially higher than in the current complex. The units would be newer, and they’d become exempt from DC rent control. That would likely price out existing low-income, market rate renters. It would also likely push rents above DCHA’s “allowable” maximum. That would place the new Brookland Manor out of reach of voucher-holding families, including those who live there now.

It’s not clear how any remaining low- or moderate-income Brookland Manor renters without vouchers would be able to stay if rents rise substantially. MidCity says it has a plan to retain the existing renters with vouchers, but advocates aren’t convinced. The company says it’s “in discussions” with DCHA about increasing the allowable rent in Brentwood, so that Brookland Manor families with housing vouchers could stay. A spokesperson for DCHA would not comment on whether or not such negotiations are taking place.

So that’s the company’s plan: preserve the 373 Section 8 units and ask DCHA to increase voucher subsidies so current residents with vouchers can live in the redevelopment. The Brookland Manor tenants’ association and housing advocates think that plan has too few affordable units overall, and will displace current residents. They don’t find the “DCHA-will-increase-subsidies” promise credible, especially because the Housing Authority has said nothing about this idea publicly, let alone made any binding commitments.

MidCity says there aren’t 535 affordable apartments at Brookland Manor

MidCity is defining housing choice voucher holders as just another set of market rate renters. As MidCity executive VP Michael Meers said to one of the tenants’ lawyers, Will Merrifield:

You say that there are 535 affordable apartments. And that is not true. There are 373 deeply subsidized affordable apartments [that are part of the Section 8 contract]. The rest are market rate apartments whose rents are assisted with DCHA Housing Choice Vouchers. And the nature of them, just because they're 80 years old, the market rents happen to be [relatively low]. But they are in fact market rate apartments.

Executive Vice President Jamie Weinbaum said, “From my perspective, there’s really only two types of tenants. There’s those that are on the project based Section 8 contract, and then there’s everybody else… Whatever form of payment a market rate tenant has is on them.”

MidCity’s definition of “affordable housing” is congruent with its plan: preserving the 373 Section 8 units, but expecting DCHA to foot the bill to allow any low-income renters to live elsewhere in the redevelopment.

I’ve tried to summarize the current and proposed affordable unit breakdown in the chart below.

I made this graph with info from MidCity Financial Corporation. Click for a larger version.

Debating this “increased voucher payments” idea

MidCity’s “increased voucher subsidy” proposal could get expensive for DCHA, reducing its budget for subsidies in other parts of the District. Meanwhile, MidCity likely wouldn’t lose a cent. As they say, voucher holders are like market rate renters to them; a government agency is just footing part of the bill on behalf of the renter. And allowing voucher holders to live in a unit doesn’t make that unit permanently affordable.

MidCity, of course, is a for-profit company. Its representatives say the company is providing more than double the affordable housing required by DC’s inclusionary zoning laws. Tenant advocates counter that the company, because it’s using a bargaining process called a Planned Unit Development (PUD), should meet that process’ higher legal standard, to “protect and advance the public health, safety, and welfare” of the community—which they say should mean not displacing current residents.

Tenants have an idea for keeping more affordable units, but MidCity says it doesn’t want “concentrated poverty”

The Brookland Manor/Brentwood Village Resident’s Association has proposed that MidCity work with them to obtain DC Housing Production Trust Fund dollars to keep 535 units affordable at their current bedroom sizes.

The idea is that MidCity would receive a low-interest loan or grant from the fund, lowering the cost of the project. In return, MidCity would agree to keep 535 apartments affordable to low-income families for 40 years. That way, even if an existing low-income tenant moved out, the apartment would stay affordable for decades, open to families on the city’s affordable housing waitlist (which currently has more than 40,000 families on it).

When I asked MidCity about this, a spokesperson said:

While MidCity wants to compromise, we are working diligently to ensure this is a viable mixed income community and there is a point at which adding more subsidized units beyond those needed for our existing residents is simply recreating the concentrated poverty that we know from experience does not breed an environment for success.

The spokesperson said MidCity has met with the Department of Housing and Community Development (DHCD) to discuss tapping the Housing Production Trust Fund to preserve some affordable units. DHCD would not comment on whether or not the agency had met with MidCity representatives.

Tenants and advocates are also concerned about lost “family-sized” units

Law firm Covington and Burling is bringing a class-action against MidCity on behalf of tenants, alleging that the company violated DC and federal protections of their “familial status” by planning to eliminate 4- and 5-bedroom apartments, and by trying to displace larger families before construction begins. MidCity representatives declined to comment on the case for this post; in court filings, they acknowledged that their redevelopment plan has fewer large apartments, but denied pretty much all the plaintiff’s other allegations.

See below for the current unit size breakdown at Brookland Manor, and in the proposed redevelopment. In an email, the company said that the townhomes would be 3 and 4 bedrooms, but I don’t know the exact mix; it also said that the exact number could change slightly as details of later-stage plans get hashed out.

I made this graph with info from MidCity Financial Corporation. Click for a larger version. Image by the author.

MidCity doesn’t plan to replace any 5-bedroom apartments. Representatives say that 5-bedroom units are not “market viable,” and as a private developer they shouldn’t be forced to build something they don’t believe will sell. The company only plans to replace enough 4-bedroom units to house what it says are a handful of current households with large families.

Advocates counter that the point of the PUD process is to impose requirements that produce “public benefits.” They say Brookland Manor needs 4 and 5 bedroom units because many of its families are multigenerational—as are many of the low-income families around DC scrambling to find affordable housing.

Building for “seniors only” could leave other tenants out of the picture

The plan raises other questions as well. 200 of the proposed 373 Section 8 replacement units would be for “seniors only,” those age 62 and over. 192 of those units would be 1-bedrooms; 8 would be 2-bedrooms.

There aren’t 200 senior tenants currently at Brookland Manor. In June 2015, when MidCity last submitted detailed tenant data to the Zoning Commission, only 106 of the 486 occupied units had seniors, aged 62 or older. There were only 116 seniors total. Even if you allow for aging as the redevelopment progresses, there were only 153 households with any members over 55. (As of April 9th, only 431 of the apartments were occupied).

Also in the 2015 data:

  • 37 of the households with seniors also had non-seniors living with them. 12 of these 37 households had children under age 13.

  • Among the 153 households with someone over age 55, 48 also had someone age 55 or younger. Those other people couldn't come along if their older family members moved into the Section 8 “seniors only building.”

Housing advocates are concerned that making half of the 373 subsidized, Section 8 units one-bedrooms for “seniors only” will make it harder to rehouse existing families. Some of the older residents with live-in families probably aren't going to live in the “senior building,” and instead compete with the other roughly 300 households for the remaining 173 non-senior Section 8 units.

And if these seniors moved into 1-bedroom, “senior only” units, what would happen to their families?